Analysts, Options Traders Target FedEx Stock After Earnings

FedEx reported earnings that beat Wall Street’s expectations

FedEx Corporation (NYSE:FDX) is trading higher this morning, after the company’s fiscal second-quarter report included a substantial earnings beat. The delivery name chimed in with earnings of $3.18 per share, well above Wall Street’s $2.82 estimates, though the company’s revenue of $22.81 billion was below forecasts.

Despite the revenue miss, investors seem encouraged by the company’s pledge to continue aggressively cutting costs. According to a statement from the company, FedEx will slash an additional $1 billion in costs. In response, FDX was last seen 6.4% higher to trade at $174.78.

Analysts seem less impressed. Before today’s open, no less than three members of the brokerage bunch slashed their price targets, including a $14 cut to $167 from Stifel. However, UBS adjusted its price target higher to $225.

FedEx stock’s 12-month consensus price target of $193.14 is a 10.7% premium to last night’s close, which leaves more room for additional price-target cuts. Meanwhile, 13 of the 21 analysts covering FDX sport a “hold” rating.

Options traders are pessimistic, too. Within the first half hour of trading, more than 18,000 puts have crossed the tap, with volume running at 17 times the intraday average. However, more than 12,000 calls have also been traded — 10 times the amount that’s typically seen at this point.

On the charts, FedEx stock is still trying to recover from a massive September bear gap that sent the shares to a more than two-year low. Coming into today, FDX sported a 34.8% year-over-year deficit.

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